To dial, or not to dial? The question of what sales strategy to use - outbound or inbound - is crucial for a young business. It could make or break your fledgling enterprise.
If you’re such a young business that you’re really low on leads, outbound suggests itself automatically. If you’re in a better position with inbound inquiries, you can run with inbound off the bat. But should you be choosing between them at all?
I don’t think so. But I understand why people see it that way, when they’re positioned as opposites instead of just options, and the trend in the last decade has been toward inbound, for all kinds of good reasons. Let’s start there.
The Move Away From Outbound Sales
For years, outbound sales defined the image of the salesperson. He was invariably male, invariably white, with a toothpaste-ad smile and the ability to say a lot without really saying anything.
This breed of salesperson is long gone, however. Why? Because, thanks to the Internet, the buyer experience is now so different to what it was even 10 years ago.
An oft-quoted CEB survey from 2014 showed that 57% of the buyer journey is now complete before a customer even gets in touch with a supplier. In order to find a way to stay relevant in this new climate, salespeople had to favor an inbound strategy over an outbound.
“The shift from outbound to inbound sales isn’t sudden at all. It’s been slowly creeping up on us since the advent of the Internet,” writes Jessy Smulski of Kunocreative.com. “When the World Wide Web became accessible to buyers and the information floodgates opened, it wasn’t long before buyers started doing their own research about products and services.
“After all, they didn’t trust their sales representative. Sales went from owning the vast majority of the buyer’s journey to only a tiny portion… [C]onsumers decided how they wanted to be sold to and sellers had no choice but to comply.”
The shift from outbound to inbound has one inescapable conclusion, according to Smulski:
“[T]he entire idea of outbound sales is dead.”
What Are The Disadvantages Of Outbound?
It’s true that there are many disadvantages to the outbound approach in the Internet age. Many salespeople working in outbound feel like Willy Loman from Arthur Miller’s Death Of A Salesman, a man out of time, still clinging to past glories and deploying archaic techniques in a world that has moved on. Let’s have a look at some of the drawbacks of the outbound approach.
There’s no getting away from it: cold calling can be rough. At its height in the 1990s, I remember my parents and their friends constantly griping about its intrusion into their evenings and their attempts - always in vain - at removing their telephone number from public display, in a bid to bring the calls to an end so they could just enjoy their damn cooking program in peace.
It’s often unpleasant, too, for the rep on the other end of the line, awkward and all too aware that they represent an intrusion into someone else’s privacy. At the B2B level, cold calls represent an intrusion into a busy person’s workday and an interruption in their concentration.
“Nobody wants to be cold-called,” writes Steli Efti of Close.io. “Even sales reps who cold-call don’t want to be cold-called.”
Outbound sales is notoriously time inefficient. Instead of interested parties coming directly to you, ready to buy - or at least likely to buy - outbound salespeople spend a lot of time simply finding leads.
Hubspot’s Emma Brudner looked at some of the startling statistics associated with outbound sales:
- The average sales rep makes 52 calls daily
- It takes an average of 18 dials just to connect with a single buyer
- Less than 1% of those contacted are likely to call back
- Less than 24% of sales emails are opened
What these statistics mean is that outbound salespeople are spending an incredible amount of time doing things other than the core element of their job: selling.
People Deploy Their Own Internal Ad Blockers
We are bombarded with advertisements every day in different situations and on multiple platforms. A 2014 study by Media Dynamics, Inc. found that the average person was exposed to 362 ads per day; wilder estimates have put this number at 5,000.
Either way, it’s a huge amount of information for us to filter—but filter it is exactly what we do. We’ve become adept at discarding ads we consider irrelevant and often do this subconsciously, choosing to ignore an ad without even realizing we’ve seen it.
What’s more, in the Internet age, where smartphone, Skype and email alerts are coming in constantly, we’ve grown ever more skilled at simply ignoring things to focus on the task at hand.
“When you’re doing outbound sales, you’re interrupting people,” writes Efti. “Everybody is an expert nowadays on filtering out interruptions… It’s like our brains have a subconscious TiVo or adware program running that immediately blocks anything that triggers the sales-pitch alarm.”
The result for the salesperson? “You basically have to buy, beg or bug your way in.”
Lengthy Sales Cycles
Inbound leads are looking to be sold to. It is therefore much easier to get a fast, efficient sales cycle working. Outbound prospects, on the other hand, often aren’t looking to be sold to, which can lead to a lot of time and energy being put in—and a lengthy, laborious sales cycle of months or even more.
When You Stop Working, The Leads Stop Coming
With inbound, you can leave the machines running in the factory even after you’ve clocked off. Inbound leads keep generating even when you’ve stopped working, meaning that you should rarely have a shortage of prospects when you start work in the morning.
“Outbound sales stops working as soon as you stop working,” writes Efti. “[A]s soon as you stop doing outbound, it stops generating new business.”
The Advantages Of Inbound
It wasn’t simply the disadvantages of outbound that led people like Smulski to sound the death knell for outbound in the Internet age. Inbound’s myriad advantages helped convince many that outbound was simply a bloated, expensive, inefficient waste of time.
Let’s have a look at some of those advantages.
If marketing is doing its job properly, you will be getting present with a steady stream of quality leads. This means you don’t have to go hunting for them via email and telephone and that they are interested in buying already. Sales should be integrated with marketing so that it can educate marketing on how to identify a quality lead.
The end result should be that reps have a lot more time to spend doing their actual job of selling instead of growing tired and frustrated from the constant hunt for leads. In modern multirole sales orgs, so the logic goes, SDRs should be spending their time qualifying leads, not chasing them up in the first place.
Interested, Informed Prospects
One of the great developments of the Internet age is that prospects now come to the table with far greater knowledge than ever before, having armed themselves prior to even engaging with a sales rep. This, in turn, has forced reps to up their game, making sure they’re on their mettle and that they come across as experts in their particular field.
This is completely different to the classic outbound dynamic of opportunistic sales rep and unsuspecting customer, and it provides the rep with great opportunities to drive future business. A prospect who is impressed with a rep’s knowledge and attention to detail is more likely to make a referral to someone they know - and that’s when the big bucks start rolling in.
“Inbound sales is about turning marketing into education, and sales into service,” writes Smulski. “Pride yourself on helping others, and make a better living at the same time. Everybody wins.”
Shorter Sales Cycles
Quality leads mean interested prospects, and interested prospects mean a decreased sales cycle. Instead of taking many months to convince a lead—always with the prospect of losing them looming large—a sale can be completed in double-quick time and the prospect of referrals keeps the sales cycle flowing very nicely indeed.
So should everyone just drop outbound altogether? No, and here’s why.
Why A Purely Inbound Approach Doesn’t Work
The advantages of inbound are so clear in the modern era, it’s understandable why people like Smulski believe that outbound should go the way of the fax machine and the CD-R.
Is Smulski correct, though? Is outbound sales “dead”? Does outbound sales have any advantages over inbound or is it a complete anachronism in the Internet age, the Willy Loman of sales methods?
Outbound Selling Works
“There’s a meme, a CommonThink, among certain segments that outbound sales is bad, or at least a little unseemly,” writes Jason Lemkin of SaaStr.com. “And maybe a lot bit [sic] old school.”
What Lemkin is getting at here is that no one likes to be seen as being a Luddite, wrecking the machinery of a new age and clinging to the past. Yet outbound sales actually works. “The fundamentals of salesmanship that worked in 1914 are still working now,” writes Efti. “Outbound sales bring home the bacon.”
Inbound Can Often Be Unfocused
When Mikita Mikado chose an inbound-only strategy for his startup, he came across some unexpected snags. “Our inbound lead channels started to reach full capacity and some channels were already maxed out,” he wrote in Sales Hacker. Another “unfortunate result” of the strategy was “higher churn rates. We were not attracting the customers who needed our product the most and who were willing to pay more for it.”
“Another lesson we learned was that our stream of leads was too broad, which caused the quality of our leads to be highly variable… Another problem we encountered was our product/market fit started to deteriorate.”
In other words, the brave new world of inbound-only didn’t quite work out for Mikado and the company folded. The solution for his new startup? A mixture of outbound and inbound sales, a structure that allowed the company to better vet leads.
“[T]his new structure…enabled us to do a better job of filtering our leads by asking qualifying questions—we did this by doing more targeted calls, attending more events, and creating more educational material. This opened up a broader range of lead sources and eventually began attracting more relevant traffic and prospects who needed our product.”
The results were impressive indeed.
“Within six months of adding a more meaningful, targeted structure, we were able to see real results,” writes Mikita. Average deal size had increased threefold, while sales performance had gone up 320%. This hybrid version had proven the perfect way for a startup to properly scale growth.
Embracing the gleaming new world of inside sales without being blinded by it to the extent where we forget the merits of outbound is a point that Lemkin also drives home.
“That we’re in a new world of sales, a new consultative world, where leads come in, prospects can try and learn before they even talk to a human, and then a sales rep thoughtfully answers questions, models business-process change, and helps them decide how and why…to buy,” he writes.
“And that’s true. We are in that world. Inside sales is terrific. Warm leads are great. Live trials of easy-to-use and deployable web services really have changed the game.”
“The majority of the world gets exposed to a vendor versus searching for one. And [people] probably [don’t] have to do an active trial, on their own… The higher you sell up in an organization, the less free trialin’ is going… You want to get to an SVP, a CIO, a VP of XYZ? You gotta get to ‘em. Call ‘em. Email ‘em… outbound works here.”
So, it would seem that Smulski was a little bit premature in announcing outbound’s demise. The message from the experts is clear: Embracing warm leads and inside sales is a net positive for most companies. But it’s not going to get the job done all by its lonesome. Reaching the right person might mean chasing them. Sometimes there’s no substitute for dialing O for Outbound.
About the Author
A serial entrepreneur and digital nomad, Geoffrey has been running his own marketing consultancy for the past year.More Content by Geoffrey Walters